New Delhi | Jagran News Desk: The Narendra Modi government has put the beleaguered Laxmi Vilas Bank (LVB) Ltd. under a moratorium for a period of 30 days, the Reserve Bank of India said on Monday. During the moratorium period, account holders would not be able to withdraw more than Rs 25,000, the RBI said. The bank will need RBI's written permission to make any payment worth more than Rs 25,000 to the depositor.

The central bank may allow withdrawal of more than Rs 25,000 in certain cases such as medical treatment cost of the depositor or his family, or higher education cost.

"...hereby stays the commencement or continuance of all actions and proceedings against that banking company during the period of moratorium subject to the condition that such stay in any manner does not prejudice the exercise of the central government of its power...," according to an official order.

The bank has been under the Reserve Bank's prompt corrective action (PCA) since September last year. Under the PCA, the RBI curbs high-risk lending and set aside more money on provisions and restrictions on management salary.

This is not the first time the central bank has put a lender under moratorium. Earlier in September last year, the Reserve Bank of India had taken control of the government-run Punjab and Maharashtra Cooperative (PMC) Bank for six-months and capped the withdrawals at Rs 1,000. 

The limit was further raised to 40,000 following large protests by depositors. In June this year, the RBI has extended the moratorium for another six months till December 22 and increased the withdrawal limit to Rs 100,000 per depositor.

Posted By: Shashikant Sharma